Using a Budget Balancing Act to Fix Debt Problems [INFOGRAPHIC]
People who have debt troubles often think that the way to fix debt problems is simply to find a way to pay their debts off. Fundamentally that’s true. But before you can, you first have to engage in a budget balancing act.
Once you get your budget under control, getting your debts paid off will follow in due course. But until that happens, your chances of getting out of debt are extremely low.
If you feel overwhelmed by your debt situation, and do not feel confident going it alone, read and find out if it's time to consider a Debt Consolidation Program.
Tips to A Successful Budget
1) A budget balancing act is mostly about getting your expenses in line with your income. The whole reason people get into debt in the first place is because they spend more than they earn. If you are in debt, your task will be to reverse this trend.
2) Central to a budget balancing act is to create a priority in your expenses. Some expenses are simply more important than others, and must be given higher priority.
3) Determine what percentage of your monthly budget (income) goes for each expense. This is important because it will tell you where most of your money is going, and where expense cuts will be most effective.
4) In order to fix debt problems, you must make sure that your debt payments are reasonable based on your income.
5) Lack of savings is a classic reason why people struggle to fix debt problems. Creating an emergency fund is a major part of the budget balancing act. It gives you extra room in your finances so that you won’t turn to credit cards every time you have a cash shortage.
About Naftali Feig
Naftali Feig holds a bachelor’s degree in finance as well as an MBA.